Defences against the apocalypse

Business columnist

Quite a glamorous husband and wife team were being interviewed on the Fox News Network this week. They were gun shop owners, thrilled to be showcasing their range of weapons on America's leading news network.

The ''Zombie Gun'' was a proud favourite, the husband said, as the two tinkered affectionately with what appeared to be a sawn-off shottie adorned with a small skull on its barrel. They had crafted this instrument of self-protection themselves.

Catering to those who needed to defend themselves against an invasion of staggering corpses was a growth market. Sales were good. The other promising demographic was selling guns to wives.

The debate was not whether a household should own a gun. Constitutional rights to self-protection were a given. It was about equal opportunity and conjugal rights.

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Why should wives not have their own gun if husbands had a gun? Was one gun enough for a household?

The rise of the multi-weapon household would presumably allow a wife to uphold her personal freedom and protect herself against any move by a husband to, for instance, hog the TV remote control.

Should either party attempt to switch the channel from Fox to, say, CNN, it might reasonably warrant the use of the zombie gun.

Switching from the Murdoch-controlled Fox News network to

the Murdoch-operated Sky News network on the Murdoch-operated Foxtel pay TV platform, we discovered the great man himself in the witness box!

Defiant as a lone zombie-hunting warrior stalking an apocalyptic landscape, Rupert told Britain's Leveson inquiry into media ethics that he was the victim of a cover-up.

The hacking and other systematic criminal behaviour were the fault of his subordinates. No, he didn't influence politicians in order to further his business agendas either.

And although he vaguely remembered British PM David Cameron popping in to see him on his yacht in the Mediterranean, or perhaps that was his wife's yacht, he couldn't recall specifics of the meeting, if there was a meeting at all.

The News Corp share price went up. It's up 8 per cent this year and 30 per cent since Rupert and his son James first fronted Parliament last July. Travelling on 14 times its 2012 earnings, News's earnings are forecast to grow at 15 to 20 per cent.

The Leveson show is further proof that ethics and market performance don't correlate much. Ethics aside, News Corp is a highly valuable collection of assets.

Murdoch has created a $50 billion global media business from a single newspaper in Adelaide. He fights on, albeit bloodied. The market has now all but factored in the succession of Chase Carey as chief executive. Even if there is a final battle for control - dynasty versus institutions - it won't destroy the value for long. Once unthinkable, the impending changing of the guard is more likely now to enhance News's value.

In case you haven't been following the Centro court case - that's the one where directors and auditors lost track of that pesky $1.1 billion before Centro shares got hammered 70 per cent - it also carries a theme of culpable subordinates. The audit firm PricewaterhouseCoopers is blaming its audit partner Stephen Cougle for the stuff-up. Cougle in turn says his juniors are at fault.

Despite being excoriated by the judge for its arguments, the PwC legal team has stuck valiantly to its guns.

It is the audit partner that signs the audit opinion, not the audit firm, they say. The end product of the audit service may be the audit opinion but PwC the firm is apparently not really there when an audit opinion sallies forth from one of its offices.

The PwC logo on the pages of the audit opinion is a chartered accountant apparition. Lest the gullible notice the words ''PricewaterhouseCoopers'' typed on the audit opinion page with a handwritten signature ''PricewaterhouseCoopers'' above it, that is just to let you know your real auditor - the individual partner that signed the audit report - can be found in an office block that has the words ''PricewaterhouseCoopers'' on the building signage.

The firm name has absolutely nothing to do with the actual audit opinion in the audit report. Although the audit opinion may happen to begin with the words ''in our opinion'', the word ''our'' does not mean the audit firm. It is Mr Cougle rather ostentatiously using the plural personal pronoun - the royal ''we''.

Yes, PwC does appear responsible for the audit. But to understand the reality of the audit world, one has to accept that while PwC the firm accepts the audit engagement and then assigns an audit partner and staff to do the audit, including carrying out audit planning and audit procedures, and PwC the firm provides the resources to do the audit tasks, including technical specialists with expertise on what constitutes a current liability, then, at the very climax of the audit, PwC the firm exits stage left.

The audit firm effectively dies as the flower of the audit opinion is about to be in bloom and the audit partner emerges like the butterfly from the chrysalis.

When the audit opinion is being signed off by the audit partner, the audit has become a solitary pursuit. PwC the firm does not dematerialise for long, however. Transcendent, it returns to collect the cheque for the audit work, including the audit opinion and thence deposits it into a PwC firm bank account.